Centre working on multi-pronged approaches to reform its statistical systems

New Delhi: The Centre is working on a multi-pronged approach to modernise India's oft-criticised statistical system, with the ministry of statistics and programme implementation (MoSPI) leading the efforts, two people aware of the matter said.

The broad plan of the statistics ministry is to improve data collection, processing, and management by leveraging advanced technologies and AI (artificial intelligence). Such an effort would also enhance the speed, accuracy, and frequency of data collection and dissemination, the people mentioned above said on condition of anonymity.

The exercise would include updating the base year for calculating gross domestic product (GDP), consumer price index (CPI), and the index of industrial production (IIP), from the current base year of 2011-12, the people mentioned above said.

The base year considered for GDP calculations will be more recent than 2015-16, added the first person.

The plan is also to increase the frequency of the quarterly PLFS survey to monthly, and launch new surveys to capture data from the informal sector, including from the service and construction sectors, which are often overlooked.

Replacing paper

“The new system will replace traditional paper methods with tablet-based data compilation, significantly reducing the time between data gathering and reporting," the first person mentioned above said, adding that the ministry is also looking at telephone-based surveys.

“Collaborations with the private sector and academia are being pursued to ensure the accuracy and credibility of national accounts," the first person said. “These are in the pilot stages. We will have to see the efficacies of these surveys/methods (before implementing them)."

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Revamping the statistical system will ensure more accurate data collection and significantly reduce the time between data collection and dissemination, the second person mentioned above said.

“For instance, some states have digitised farmers' land maps and equipped field workers with geographic information system or GIS-enabled mobile phones to photograph crops, allowing for more precise crop estimation," the second person said. “This approach marks a significant improvement in our ability to estimate agricultural production accurately."

A MoSPI spokesperson didn't respond to emailed queries.

An ongoing process

India's former chief statistician T.C.A. Anant said this kind of change is an ongoing process. “Like all aspects of governance, there is a constant need for change and in some cases, improvement; in some cases, additional resources; and in some cases, more things to be done in the statistical system, too."

According to Anant, conducting the population census, which got delayed due to the covid-19 pandemic, will help in improving sample surveys that rely on the preceding population census.

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He also suggested that the data generated by various e-governance programmes of the government and by the GST ecosystem should be put to wider use in estimating economic activities and in research.

Meanwhile, MoSPI has already begun working on the second part of the annual survey of unincorporated sector enterprises, which is expected shortly and captures the unorganised sector. The first part of the survey was released in July.

The ministry is also working on a first-of-its-kind annual survey of service sector enterprises, likely to be released before the end of the ongoing financial year.

Under scrutiny

India’s statistical system has in the past come under scrutiny with experts pointing out certain weaknesses, leading to public debates on the robustness of various data sets.

Arvind Subramanian, former chief economic advisor in the finance ministry, had commented in a paper in 2019, after he had left the position, on significant overestimation of India’s economic growth between 2011-12 and 2016-17 because of methodology changes.

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Subramanian had argued that the actual annual average GDP growth may have been 4.5% for the five years up to FY17, instead of the official estimate of 7%.

This argument was subsequently questioned by Bibek Debroy, chairman of the Prime Minister’s Economic Advisory Council, in a paper signed by the council, as well as by other economists.

The budget's vision

In the Union Budget 2024-25, presented by finance minister Nirmala Sitharaman in July, the Centre emphasised enhancing data governance and improving the processes of data collection, processing, and management as part of its next-generation reforms and strategic policies.

To enhance data governance and improve data collection, processing, and management, the government will utilise various sectoral databases, including those developed under the Digital India mission, the latest Union Budget 2024-25 said.

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“This effort will be supported by the active use of advanced technological tools, aiming to streamline and optimise the handling of data and statistics across different sectors," the budget documents added.

The Economic Survey, released a day before the budget, also talked about strengthening the statistical system to produce high-quality data within given timelines for better-formulating policies and timely decision-making.